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An example of a weakness in internal control is: The use of a signature stamp for checks b. A petty cash box c.

16. An example of a weakness in internal control is:

a. The use of a signature stamp for checks

b. A petty cash box

c. Having the bookkeeper deposit cash receipts and also prepare the cash receipts journal

d. Having the bookkeeper deposit cash receipts and also prepare checks

e. Having the bank statement mailed to the owner's home address 3


17. The payroll with holdings that must be matched by the employer are:

a. Social Security withholding

b. Medicare withholding

c. Social Security and Medicare withholding

d. Social Security, Medicare, and CA SDI withholding

e. None of the above


18. Reasons why a check written and recorded in the cash disbursements journal may not appear on the monthly bank statement include:

a. The cash disbursements entry is erroneous

b. The recipient hasn't deposited the check yet

c. The check was lost in the mail

d. The check was held and never given to the recipient

e. All of the above


19. Which is a valid reason for not keeping a set of accounting records for a business?

a. All that's important is the amount of cash in the bank. That will tell the business how profitable it is.

b. A set of books would leave a trail for the IRS to be able to tax the business.

c. The owner is much too busy growing and running the business to spend time number crunching. If the customers are happy, then the business is successful.

d. Simple is best, and a shoe box filled with receipts is the only accounting record needed.

e. None of the above


20. Internal control over cash is similar to management of cash in that:

a. Both are concerned with the preservation of an asset

b. Both, if mastered, can lead to maximum return on the owner's investment

c. Both are concerned with maximizing the return on cash

d. a. and b.

e. a. and c. 

Top Answer

c. Having the bookkeeper deposit cash receipts and also prepare the cash receipts journal (too much cash recording and... View the full answer

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